CEWales E Bulletin September 23 - Transitioning to net zero will not be achieved over night – especially decarbonising steel

Steel is the world's most widely used material – and traditionally a carbon megaproducer due to the energy used in its production. Its wide-scale use in construction is a key factor behind the industry's carbon impact, with new buildings and major infrastructure projects across the globe accounting for more than 50% of steel demand. Around 2% of the UK’s total carbon emissions or 14% of its industrial emissions are attributable to iron and steel production.

We will all be aware of the recent announcements and press articles about job cuts in Tata Steel, which is an extremely worrying time for steel workers in Port Talbot, but we need to look at these challenges in the wider context. These pressures all centre on a pursuit to net zero as industry switches to more environmentally friendly forms of steelmaking. Tata Steel and the UK Government have jointly agreed on a proposal for the largest investment in the UK Steel industry for decades. The proposal lays the decarbonisation pathway towards globally competitive and sustainable steel making in Port Talbot. The new Electric Arc Furnace would replace the existing coal-powered blast furnaces – which are nearing the end of their effective life – and reduce the UK's entire carbon emissions by around 1.5 per cent as a result. The company claims the project will bolster the steel sector and will reduce direct emissions by 50 million tonnes over a decade. The Government adds that it will reduce the UK’s entire business and industry carbon emissions by 7%, Wales’s overall emissions by 22% and the Port Talbot site’s emissions by 85%.

Tata steel has been clear about its full commitment to reducing its impact on the environment and have the ambition to produce net-zero steel by 2045 and to achieve 30% reduction in emissions by 2030. Tata Steel is engaged in a wide range of initiatives to decarbonise and have launched their innovative Carbon Life solution for short term decarbonisation. They remain positive that with the support of government they will be able to transform their steelmaking assets. Tata Steel is part of the Green Hydrogen Alliance (GHA), launched earlier this year to help ensure the UK remains competitive globally in the development of low-carbon hydrogen, which forms part of the long-term plan for zero-carbon steel-making in this country. It is believed that having a long-term vision that leads to hydrogen-based steel manufacture at Port Talbot, as well as the arc furnaces that recycle used steel, could protect many more jobs.  

Circularity and scrap-based recycling are viable options to support decarbonisation which Celsa Steel are clear in leading the way. Modular construction should not be overlooked in supporting decarbonisation as well as the importance towork across the whole value supply chain. It’s important to learn from the clients, contractors and engineers who have a plethora of experiences of re-using steel with a 'circular' approach, recycling steel, and other methodologies to increase the environmental credentials of steel products used in today's major construction projects.

There are many challenges in creating a sustainable UK Steel industry. For one, it needs more energy security, as on average UK steelmakers pay 63% higher prices on electricity than those of competitors and carbon leakage is a substantial risk from the cost of emissions trading compliance.

Overall, this is a positive move for steel making in Wales with a great opportunity for the development of a green technology-based industrial ecosystems in South Wales.